AVM.L Regulatory News (AVM)

13 Feb 2008 07:00

Avocet Mining PLC13 February 2008 AVOCET ENHANCES GROWTH PIPELINE ADDS ANOTHER ADVANCED EXPLORATION PROJECT IN INDONESIA Avocet Mining PLC ("Avocet" or "the Company") announces that it has expanded itsexploration presence in Indonesia by signing a Memorandum of Understanding ("MoU") with a local party in northeast Kalimantan giving it the right to earn an interest of up to 80% in an advanced gold project by funding the project through to a decision to mine. Following the Banda acquisition last year, thistransaction is another step in the Company's strategy of generating organicgrowth capable of supplementing existing operations and expanding the Group'sresource base. The Company has signed an MoU with PT Sago Prima Pratama ("Sago") on theSeruyung property. Sago is an Indonesian company that owns 100% of Seruyungthrough a Kuasa Pertambangan Explorasi, or national exploration license,covering an area of 40 km2. More details on the location of the property arelaid out in the figure in the version of this announcement on the Company'swebsite. Seruyung is a high-sulphidation epithermal system suitable for heap leaching,similar to the Company's North Lanut gold mine and Bakan development project.The property was first discovered by Indochina Goldfields Limited (IvanhoeMines) in 1994. Drilling by Indochina and follow up work by Canadian listedjunior, Pencari Mining, inferred a contained gold resource in the region of225,000 to 330,000 ounces. Avocet believes that the high-grade feeders that form these deposits have notbeen fully explored and are not modelled in the Indochina or Pencari resourceestimates. The Company also recognises potential for additional low-grade,heap-leachable mineralisation within the tenement. These two factors lead Avocetto believe that the project has the potential to host at least 500,000 ounces ofgold. Additionally, the project is located on a small hill above a broad coastalplain approximately two kilometres from a navigable river. These are positivefactors for potential mine development. The Company considers that itsestablished local presence, exploration expertise and ability to develop heapleach projects at modest capital outlays will allow it to add greater value tothe project than recognised by previous explorers. The MoU with Sago allows Avocet to earn a 51% beneficial interest in theproperty by funding a US$800,000 exploration programme. This programme willinclude ground geophysics, drilling and metallurgical test work designed todevelop a JORC-compliant resource. The Company can earn a further 29% by fundingthe project to a decision to mine. Avocet is completing due diligence andexpects to commence drilling by the second quarter of 2008. The Company has alsoworked with Sago to control the surrounding area through additional tenementapplications. Jonathan Henry, Chief Executive Officer, commented: "This transaction brings another advanced exploration project into our portfoliothat has the potential to add to our producing assets within two to three years.Just as we have seen at North Lanut, this style of mineralisation is ideal for aprofitable, low-cost heap leach operation." For further information please contact: Avocet Mining PLC Buchanan Communications Financial PR ConsultantsJonathan Henry, Chief Executive Officer Bobby MorseMike Norris, Finance Director Robin Haddrill020 7907 9000 020 7466 5000www.avocet.co.uk www.buchanan.uk.com Ambrian Partners Limited JPMorgan CazenoveNOMAD and Joint Broker Lead BrokerRichard Brown Michael Wentworth-StanleyRichard Greenfield Sam Critchlow020 7776 6400 020 7588 2828www.ambrian.com www.jpmorgancazenove.com Notes to Editors Avocet is a mining company listed on the AIM market of the London Stock Exchange(Ticker: AVM). The Company's principal activities are gold mining andexploration in Malaysia (as 100% owner of the Penjom mine, the country's largestgold producer), and Indonesia (as 80% owner of the North Lanut gold mine andBakan project in North Sulawesi). The Company has a number of other advancedmining and exploration projects in South East Asia. All references to resources and exploration results have been approved forrelease by Mr Peter Flindell, BSc (Hons) MAusIMM, Chief Geologist for Avocet,who has more than 20 years experience in the field of activity concerned and isa Competent Person as defined by the JORC Code (2004). He has consented to theinclusion of the material in the form and context in which it appears. This information is provided by RNS The company news service from the London Stock Exchange